Question

Explain any three factors to be considered by an entrepreneur while assessing the market.

Answer 1

1. Demand: The demand assessment will be based on the size of the market being targeted, i.e., local markets, markets at the state level or national/international markets. It will also involve a study of the target groups of consumers, their preferences, tastes and other related variables.
2. Supply and nature of competition: While assessing the market, supply position is also studied by entrepreneurs. It is the complete picture of quantities of the product made available in the market by all the existing players. It should take into account future supplies from possible entrants in the field.
3. Cost and price of product: It is important to determine the cost of the product and its comparison with available products in the market. Cost variables of competitors in terms of transportation delays, wastage, storage, etc., have to be studied to spot cost advantages. This will influence the delivery mechanism of the identified product or service.
4. Project innovation and change: Market assessment will require a study of prevailing innovations and changes being carried out by existing entrepreneurs. Technological advancements in the field have to be analysed because they may change the quality and influence the cost and price ultimately.